What do investors need to know about the Cyprus real estate market?
Residential property prices have risen by 7% since 2015. But the market has developed unevenly, with prices ranging from an increase of 3.7% in 2019 to a decline of 3.4% in 2021. House price changes correspond to inflation, making Cypriot real estate a reliable asset.
Property prices increase along with the post-pandemic recovery of the tourism sector. In 2022, prices recovered and began to go up: from January to May 2023, the average property cost increased by 10% compared to the same period a year earlier.
The number of areas under construction decreased by 15% in 2022 compared to the previous year. At the same time, the number of properties put into service increased since developers prefer real estate types with the most liquidity, such as studios and small apartments. Thus, even when construction volumes in Cyprus fall, the real estate market grows.
Cypriot real estate is available to residents: 70% of the population lives in their own homes and apartments, corresponding to the EU average. For comparison, 46% of people in Germany and 90% in Hungary live in their own properties.
The average rental yield is 8.5% per year. Investors can rent out real estate independently or through a foreign property management company.
About 600,000 tourists rent residential real estate in Cyprus every year. In addition, approximately 270,000 locals and expats rent houses and apartments, including long-term.
Properties that investors prefer to buy in Cyprus
Apartments are bought twice as often as houses or townhouses on the real estate market in Cyprus. Cypriots are moving to cities, which explains the growing apartment demand: since 2015, the urban population of Cyprus has increased by 20%.
The average price of an apartment is €235,000. Apartments under €250,000 are the most in-demand: they are bought five times more frequently than properties under €500,000.
The price depends on the area, proximity to the sea, transport accessibility, and the residential complex’s infrastructure, such as a swimming pool, elevators, and parking.
The average house in Cyprus is €316,000, but most people buy houses under €250,000. However, homes in the price category under €500,000 are more popular than apartments of the same price.
Limassol, Paphos, and Nicosia are the most popular areas to buy real estate, accounting for three-quarters of all sales.
Foreigners are more likely to buy residential properties in Limassol, Paphos, or Larnaca; 9 out of 10 transactions are made in these three southern coastal areas. Limassol leads in the highest price category: three-quarters of apartments and houses priced over €1.5 million were bought in this area.
Average value of property transactions in Cyprus by area
| Area | Average transaction amount |
| Limassol | €330,000 34% of all sales to foreigners |
| Paphos | €240,000 34% of all sales to foreigners |
| Nicosia | €165,000 6% of all sales to foreigners |
| Larnaca | €160,000 20% of all sales to foreigners |
Cyprus permanent residence for property buyers
Investors get Cyprus permanent residence when buying properties worth €300,000 or more. The buyer's family members can also obtain permanent residence: a spouse and children under 25.
A Cyprus residence permit allows holders to optimise taxes, conduct business in the country, get a “plan B”, or relocate to the seashore.
An investor can buy one or two residential or commercial properties with a total value of €300,000 or more. Residential real estate must come from the primary market only, while commercial real estate can come from both primary and secondary markets.
The buyer of the property for permanent residence confirms that the funds were earned outside Cyprus. Additionally, the investor transfers €50,000 to a Cyprus bank to verify their financial viability. For each family member, an additional €15,000 is transferred.
Cyprus permanent residence is issued indefinitely, but investors must confirm property ownership annually and update their residence permit card every five years.
How to buy a property in Cyprus
Buying real estate in Cyprus takes several weeks. Investors can choose properties remotely or come to Cyprus.
Investors can make a deal independently: the laws of Cyprus do not require the involvement of a real estate lawyer or a solicitor. But a lawyer will simplify the transaction process: check the integrity, get a permit from the Council of Ministers to acquire a property in Cyprus, conclude a power of attorney authorisation, and register the property deed.
The buyer needs a local bank account to pay for the purchase. All buyers must visit Cyprus's bank branch to open an account.
Accompanying costs for the purchase range between 3.2 and 20.2% of the property value, including the following:
- a transfer tax for resale real estate — 3 to 8%, depending on the value;
- VAT on new buildings — 5 to 19%;
- stamp duty or a state registration fee — up to 0.2%, depending on the cost, but not more than €20,000;
- legal support of the transaction — 1%.
The process of buying real estate in Cyprus by a non‑European Union foreigner has seven stages:
- Selecting a suitable property.
- Getting a permit to acquire property from the Council of Ministers of the Republic of Cyprus.
- Opening a Cypriot bank account for purchase and sale agreement transactions.
- Signing a preliminary contract and depositing up to 10% of the property’s price to reserve it for two months.
- Signing a purchase and sale agreement and paying up to 30% of the property value in advance.
- Registering the transaction and getting the title deed from the Cyprus Land Registry.
- Pay the rest of the price minus the deposit and the 30% advance.
Real estate mortgages can be taken out by citizens of Cyprus and foreigners with residence permits or permanent residence. Interest rates, either adjustable or flat, are approximately 4%, and down payments range between 10 and 35% of the property value. A mortgage loan is issued for 5—40 years.
Maintenance costs for a property in Cyprus
Taxes. In Cyprus, there is no real estate tax per se. However, owners pay an annual municipal fee of €55 to €185 for outdoor lighting, street cleaning, sewerage, and repairs. The fee amount depends on the area and the property size.
Rental income is part of the income tax base. The tax rate is progressive, with a 0—35% range. The maximum rate is partially levied from an income that exceeds €60,000 per year.
Utility costs vary from €100 to €300 per month for a 90 m² apartment. They include electricity, water, and house maintenance.
Internet and digital television cost €25 to €50, depending on the provider, speed, and additional services. Installation of the Internet or TV is usually free.
Costs associated with selling real estate in Cyprus
Property sellers pay a capital gains tax: 20% on the difference between the purchase and the sale prices. Sellers are entitled to tax deductions: for example, in the amount of the expenses for house repair.
Sellers also pay a fee if they use agency services: 3—5% of the transaction amount.
3 advantages of buying a property in Cyprus
1. A profitable and liquid asset. Residential real estate prices have been increasing in Cyprus. At the same time, the price increase corresponds to inflation, which allows investors to protect their capital.
Investors can rent out real estate and receive an additional annual income of 8.5% of the property value.
2. Cyprus permanent residence to move or have a “plan B”. Property buyers can get Cyprus permanent residence together with their families. Investors can relocate to Cyprus or visit the country even when the borders are closed to tourists while having their primary home in another country.
Cyprus permanent residence by purchasing real estate gives the holders the right to establish a company and serve as its director.
3. Simplified path to a Schengen visa. Cyprus is a part of the European Union but not the Schengen Area. Therefore, Cypriot residents need travel visas to go there. Only Bulgaria and Romania can be visited visa-free.
Summary: what to consider when buying or selling real estate in Cyprus
- Cyprus property prices have increased by 7% over seven years. The price dynamics were negatively affected by the pandemic, but the market’s decline has since stopped, and the growth has resumed.
- The demand for Cyprus real estate is growing: in 2022, the purchase and sale transaction number increased by 12%, and the sale volume by 27%.
- The average apartment cost is €235,000, while a house costs approximately €316,000.
- The most popular Cypriot areas among foreign buyers are Limassol, Paphos, and Larnaca. Limassol leads in the highest price category: three-quarters of properties over €1.5 million were bought here.
- Real estate buyers get Cyprus permanent residence if the property costs €300,000 or more.
Frequently Asked Questions
You must come to Cyprus at least once. Selecting a property and concluding a purchase and sale agreement can be remote. However, the buyer must open a Cyprus bank account to process the transaction. The account can be opened only after visiting the bank’s branch.
The choice of real estate depends on the investor’s goals: finished housing is often bought to be rented out, while properties under construction are meant for a capital increase.
Properties priced under €250,000 are the most popular, but buying a property worth at least €300,000 can get you Cyprus permanent residence.
In addition to the liquid asset, investors get Cyprus permanent residence, allowing them to get a “plan B” for emergencies, relocate to Europe, optimise taxes, and conduct business.
Permanent residency gives the right to live in the country, but it is not an obligation: investors can choose to reside in Cyprus or another country. Investors who move to Cyprus and live there for five years can apply for citizenship.
The expenses depend on the investment option and family composition. The Cyprus permanent residence program offers four investment options: to purchase residential or commercial real estate, Cypriot company shares, or investment fund units.
For example, a family of three consisting of an investor, their spouse, and a child under 18 will spend at least €319,000 on Cyprus permanent residence by real estate purchase, where €300,000 is the property cost and €19,000 are the associated costs. Additionally, investors must transfer €75,000 to a Cyprus bank to confirm financial viability.
Property buyers pay VAT when purchasing a new building or a transfer tax for resale properties. Additionally, stamp duty or a state registration fee is paid. Associated costs start at 3.2% of the property value.
Buying a house for at least €300,000 allows you to get Cyprus permanent residence. Permanent residence holders can enter the country even when the borders are closed to tourists. A property owner with permanent residency can live in Cyprus or another country.
The Government of the Republic of Cyprus, a member state of the European Union, does not control the territory of Northern Cyprus — the so-called Turkish Republic of Northern Cyprus.
The United Nations does not recognise the TRNC, so the legal status of real estate in Northern Cyprus is ambiguous. Properties are built, sold and registered in the TRNC jurisdiction. However, real estate in Northern Cyprus does not give the right to obtain Cyprus permanent residence by investment.
Owners of a 90 m² apartment in Cyprus spend an average of €2,200 per year on utilities. Additionally, owners pay an annual municipal fee for infrastructure maintenance.
Cyprus citizenship can be obtained by naturalisation if you buy a property, get permanent residence and live in the country for five years. Real estate worth at least €300,000 is suitable for getting Cyprus permanent residence by investment.
